Safety specialist TRW Automotive expects to win big from the push by automakers to launch cars that can drive themselves. That's because autonomous driving only becomes a reality if the vehicles have highly advanced safety technology. Peter Lake, TRW's head of sales and business development, says we're heading into "the era of active safety." He spoke with Automotive News Europe Managing Editor Douglas A. Bolduc.
How do safety and autonomous driving come together?
When you talk about semiautomatic or automatic driving, the foundation of that is safety. If you are going to take your hands off the wheel for more than a split second, you're only going to do that if you think it's safe. Therefore, the need for safety becomes even more important. We're entering the era of active safety. That doesn't mean that passive safety is done. We're going to see it continue to grow, especially in developing markets. But when you consider the engineering potential that is available to us from active safety and how active safety is the fundamental enabler of the longer-term semiautonomous or autonomous driving, then that's the right place to be.
Renault CEO Carlos Ghosn and Daimler CEO Dieter Zetsche have said there will be autonomous cars on the road by 2020. Is that a reachable goal for suppliers?
There are so many issues that one has to address. Does that mean that it's not going to happen? No. This is inevitably going to happen. It will be a step-by-step evolution.
Is 2020 too fast?
It depends. Is it one vehicle or 90 percent of vehicles manufactured? It's a little bit like electric cars. Everyone was making these types of announcements. I wouldn't disagree with them. They're right, but in what volume?
Name: Peter Lake
Title: TRW Executive VP Sales & Business Development
Challenges: Meeting automakers' ambitious targets for launching self-driving cars; adjusting supplier's European production footprint.
TRW has said recently it wants to close plants in Germany and the Czech Republic. Do you need to close more plants in Europe and open more in low-cost countries?
We have some challenges, but TRW has always had a step-by-step approach to restructuring. We'll continue to do that in a sensible and objective way.
Is the overcapacity at Europe's auto plants a big problem for suppliers?
We make our own decisions and manage where we put capacity and how we manage it. It is just part of the decision-making we go through every year. We're fortunate that we have a pretty good mix of customers and platforms in Europe and around the world.
Have we hit the bottom in Europe?
We're hopeful that we have reached the bottom. I tend to be an optimist so I can't see us going lower, but I think we need to see it out for the rest of this year before we really know where 2014 is going. Q4 will be pivotal in terms of seeing whether what some of us see as green shoots in the last few months are really green shoots.
How about even further in the future?
Long term, the one certainty with this industry is that we're going to build more cars. Automotive is a good place to be. If you're into the sorts of products that we're into, then it's a good place to be. That's what matters to us.
What about TRW's future, particularly in Europe?
We've made sure that we are backing products that provide us with content growth over time, so that even in markets that are less than stellar in terms of vehicle volume growth, we have at least an opportunity to be able to build content for the vehicle.
Does TRW make money in Europe?
TRW was profitable in Europe in 2012 and continues to be profitable.
Lake: “You’ve got to get the price and the cost points right. If you don’t you aren’t going to survive.”
Are you looking to grow the business through acquisitions?
We've got a tremendously strong balance sheet. If there are opportunities for bolt-ons we're always on the lookout.
Suppliers such as Edscha and Halla Visteon are expanding into Russia. Will TRW open a plant there, too?
We haven't announced anything in terms of local production at this point. When the time is right and the business case makes sense, we have no reason not to support manufacturing in Russia.
Automakers are looking to lower their car prices in Europe, which means suppliers are going to be asked to do the same. How do you cope?
It's business as usual. Like many other industries, you've got to get the price and the cost points right. If you don't you aren't going to survive.